Clubs’ jackpot hit: no surprise

As has become my habit, I read past issues of Singapore newspapers, after my nephew’s family has done with them.

Today, I chanced upon an article in the Today freesheet which documented the sorry state of the coffers at Singapore’s social clubs, and all due to the opening of the integrated resorts or casinos for short.

The jackpot rooms of these clubs — which used to contribute the giant slice of their income — have been all but been deserted, with their faithful followers drawn as if by magnet to the casinos, the $100 daily levy on Singaporeans and permanent residents notwithstanding.

I’ve reproduced the article in full below and want to boast that’s exactly what I had forecast would happen in this post as far back as June.

Actually, it’s a no-brainer. If you like playing jackpot or slot machines, regularly or even occasionally, the casino is the place to be.

If nothing else, the sheer number and variety of machines, besides the far bigger winning possibilities, available at the casinos leave what’s offered by the various clubs, including those run by NTUC, looking like pauper cousins from the ulu!

So, my forecast for 2011 is that the jackpot revenue at our clubs will continue south, unless, unless, horror of horrors, our dear garmen raises the entry levy!

With this possibility lurking in the days ahead, perhaps I should direct the hongbaos I hope to collect in the upcoming Chinese New Year to buying myself a full year entry to Marina Bay Sands? Or should it be at Resorts World Sentosa which I’ve yet to visit! 😀 😀

Clubs’ jackpot coffers take a hit

Athletes and community programmes could be bigger losers if the clubs can no longer support them

05:55 AM Dec 09, 2010
by Teo Xuanwei

SINGAPORE – Some clubs will have to sponsor fewer training sessions for national athletes they support. Others may cut back on community welfare programmes or give out fewer scholarships and bursaries. And up to four S-League teams may even have to drop out.

All this because of plummeting revenue from these clubs’ jackpot rooms, with many of their regulars flocking to the casinos in Resorts World Sentosa and Marina Bay Sands.

Jackpot takings, which constitute some 20 to 80 per cent of clubs’ revenues, have plunged by as much as 60 per cent since the integrated resorts opened, managers told MediaCorp.

Clubs are now pleading for a lifeline from the Ministry of Finance, in the form of lower duties. Currently, they pay 30 per cent tax on the deemed turnover from their fruit machines. Clubs had appealed against the 12-per-cent tax on actual turnover – a “significantly higher burden”, according to the clubs – which was to have been introduced in 2006.

A review of the new private lottery duty is ongoing.

In one manager’s words, if taxes are not lowered, many clubs will be “in jeopardy”. They hope to pay 15 per cent of deemed turnover, similar to what the IRs pay.

Singapore Recreation Club general manager Abdul Rashid said: “All we’re asking is for an equal footing. If the proposed 12-per-cent tax kicks in, we’ll be hit very hard. Some things like funding for certain sports may have to go.”

The SRC supports 15 sports, including snooker and bowling.

Its funding for sports activities next year has already been cut 30 per cent, said Mr Abdul Rashid.

The Chinese Swimming Club also uses part of the revenue from its 35 jackpot machines to fund some national swimmers, such as Mylene Ong, who train there. So far, takings have slumped by over 40 per cent.

General manager Rosalind Tan said: “Should the tax be fixed at 12 per cent, our preliminary calculations show that our revenue will be very significantly reduced, on top of the fact that the base is now much reduced.

“The club will have to take a long-term view and review its current operations, including its business model in entirety, should its jackpot results continue to suffer or if it becomes untenable to operate.”

S-League clubs could be hardest hit

At the National University of Singapore Society, the approximately $2.8 million it makes annually from 50 jackpot machines helps to fund community care initiatives, scholarships and bursaries, among other causes.

Revenues have fallen more than 30 per cent and chief executive Tong Hsien Hui expects a further 10- to 15-per-cent slide next year.

S-League clubs may end up the hardest hit. Some of their operating budgets are 80 per cent from jackpot revenue.

Said one official, who declined to be named: “If this new tax law is passed, we won’t be able to afford to take part in the league – and this is the case for most of the other local clubs as well.”

When contacted, Football Association of Singapore president Zainudin Nordin said it would be a “double whammy” if the new tax is implemented on football clubs.

“It will have a direct negative impact on the operation of these clubs,” he said.

The clubs, which each need between $1 million and $2 million annually, have done a study on the anticipated impact of a 12-per-cent duty on actual turnover, he said.

“We want to engage (the authorities) and give feedback because they may not be aware of the quite serious impact the new tax will have,” he said.

“The fruit machines are not a profit-making exercise for football clubs. The funds that come out of these operations are put back into funding the club’s football needs.”

A Ministry of Finance spokesperson said: “MOF regularly reviews its tax policies and as part of the process, seeks views and inputs from various parties.”Additional reporting By Shamir Osman

Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved

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